Faraday Copper Enters Agreement with BHP for San Manuel Acquisition

Faraday Copper (CPPKF) entered into a definitive purchase and sale agreement with a wholly owned subsidiary of BHP Group (BHP) in respect of the previously announced transaction whereby Faraday will acquire from BHP the San Manuel property, adjacent to Faraday's Copper Creek project, located in Arizona, USA. Under the terms of the Agreement, Faraday will acquire 100% of the San Manuel property. As consideration for the Transaction, Faraday will issue to BHP common shares of Faraday equivalent to a 30% interest in the issued and outstanding common shares on a fully diluted basis as of the date of closing. Including shares issued to BHP from its participation in the C$100M private placement in March, BHP is expected to hold approximately 138M common shares after the closing of the Transaction. In addition, BHP will be granted customary investor rights pursuant to an investor rights agreement, provided it maintains a minimum shareholding requirement. The Agreement contemplates that on the closing of the Transaction, BHP will transfer all of its interest in San Manuel, which comprise the legacy San Manuel Copper Mine, the Black Hills Quarry and the Camp Grant Quarry, and related rights and assets. As consideration for the purchase, Faraday will assume all liabilities, including all environmental and closure liabilities, related to San Manuel and will issue the Consideration to BHP. Faraday has also agreed to certain operational and other post-closing covenants covering customary international industry, environmental and stakeholder engagement standards. The Agreement further contemplates that, concurrently with the Closing, Faraday and BHP will enter into, among other things, an offtake rights agreement, a water supply agreement and an investor rights agreement. The investor rights agreement will provide BHP with, among other rights and entitlements, board nomination rights, equity participation rights, and registration rights and will impose certain obligations on BHP including customary standstill, voting and transfer restrictions. The Agreement provides for customary deal protection, including non-solicitation covenants, a "fiduciary out" permitting Faraday to consider and accept a superior proposal, matching rights in favour of BHP, and the payment of a $12M termination fee in certain circumstances. Subject to the receipt of all necessary approvals, the Transaction is expected to be completed by the end of the third quarter.